DURHAM, N.C. – Two years ago, Jud Bowman was selected as one of 75 high school students from around the world for a six week academic program at the Massachusetts Institute of Technology focused on mathematics, science and engineering. While there, he spent most of his evenings with fellow classmates discussing ways to improve Internet search engines.
Little did he know, this would later lay the groundwork for the launch of his own company, Pinpoint.com, which designs custom-made search engines on the Web for very specific subjects.
Bowman returned to the North Carolina School of Science and Mathematics in the fall of 1998 and quickly enlisted the help of his dorm mate, Taylor Brockman, who was regarded as the school’s computer wiz. The two 18-year-olds devised their own search engine in their free time and after graduation, met with local venture capitalists looking for financing.
Pinpoint, already up and running since September 1999, designs topic specific search engines for vertical Web sites – locations on the Web that are devoted to a particular topic, such as golf or dogs. “If you think of the Web as all the water on the planet, other search engines index it all, but we can index just the whales, if that is what you want,” Bowman explains. In other words, a cyber-surfer can use the search engine Pinpoint custom made for a site like Golf.com to find a list for drivers and be sure that the search hits only golf clubs.
In mid-March the company received $5 million in a first round of venture capital led by Noro-Moseley Partners and the Wakefield Group, each investing $2 million. The TriState Investment Group, a group of angel investors, provided the remaining $1 million. Jim Strathmeyer, Pinpoint’s CEO says the company didn’t simply go with the funding proposal that brought in the most money, but sought venture firms that would provide strategic assistance. And that came in the form of Charles Moseley, general partner of Noro-Moseley and Steve Nelson, managing director of Wakefield, two VCs with vast experience in information technology investing.
TriState provided the bulk of $800,000 in seed funding in September 1999, along with individual investors. Pinpoint plans to use the capital to hire 20 more employees over the next two to three months and to expand its marketing staff and budget, Strathmeyer says. In addition, the company will add more programmers to develop its search engine, as well as purchase new computer servers and other additional hardware.
Bowman says the company likely will need additional rounds of financing in the second half of this year, but was unsure about the exact amount. Both men say they are focused on growing the business rather than thinking about the timing of an exit strategy.
Pinpoint differs from it competitors in a number of ways, Bowman says. Most importantly, is the company’s unique custom tailored search technology based on a client’s specific needs. Established search engines like AltaVista or Lycos index the entire Web and serve as portals that guide surfers to other sites, says Strathmeyer. Pinpoint is not a portal, but an infrastructure company that provides a tool for other Web sites.
Pinpoint is prepared for the growth of the Web because Brockman has designed a flexible search platform that can index more than just HTML, the current Internet standard programming language. Through Brockman’s efforts, the company can also index WML, the language used for wireless Web devices. This is yet another pioneering feature that will propel Pinpoint into the future because wireless is predicted to have explosive growth, he adds.
The company’s product is being beta tested with Golf.com, the American Kennel Club and StartUpStreet.com. Pinpoint’s search engines at Golf.com and the Kennel Club are only being used by in-house staff, but StartUpStreet.com’s search engine is being used by the public. Pinpoint plans on a full roll-out by the end of the first quarter.
Pinpoint has a two-fold pricing model, charging Web sites an initial fee for building a customized search engine and a yearly subscription fee, based on the number of searches for which the engine is used. Bowman estimated that the cost can range from $10,000 for a small company that signs up for a limited number of searches to six figures for a large business. The $10,000 includes the subscription fee for one year and customization fee. Pinpoint’s service is less expensive than using a search engine powered by Inktomi Corp., Strathmeyer said, because Inktomi searches the entire Web in the traditional fashion and requires Web sites to buy mini-servers to support the search, which increases costs. Pinpoint search engines require the customer to buy no additional hardware, he says. Neither would discuss the company’s revenue.
Nelson, of the Wakefield Group, said his firm invested in Pinpoint because he believes the business-to-business infrastructure space promises great potential for returns. Moseley agrees, saying he likes the fact that Pinpoint is an enabling technology, not another business-to-business e-commerce company.
Wakefield and Noro-Moseley brought in Internet guru Stephen Arnold to help conduct due diligence on Pinpoint. Nelson said Arnold referred to Bowman and Brockman as “a couple of Mozarts” after reviewing their work.